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Gift Etiquette

Do you know how much to spend on gifts?

Gift giving can be tricky. Figuring out how much to spend on gifts is a major stressor that can suck the joy right out of giving. While some experts post detailed guides showing exactly how much to spend on certain people, we think that guidance really misses the mark.

How much should you spend on gifts? That depends on two things:

  1. Your budget.
  2. Your relationship with the recipient.

Your Budget. When deciding how much to spend on gifts, begin by setting a realistic budget. People’s budgets look different every year, and we should always be mindful and respectful of people’s circumstances. Be smart about what you can do and stick to your limit.

Remember that the purpose of gift-giving is to honor the people you care about. You might think that expensive gifts are the most appreciated, but science does not back that up. At least three studies report no association between the price of a gift and the gift-recipient’s feelings of appreciation. In fact, the mere act of giving makes us and the recipient feel good. Giving triggers the Happiness Trifecta, a powerful surge of dopamine, serotonin, and oxytocin that boosts our mood and improves our health. It turns out that it really is the thought that counts!

Your Relationship with the Recipient. Once your budget is set, prioritize gifts for the people closest to you. Instead of trying to match your family and friends dollar for dollar, focus on finding gifts that are truly meaningful to them, which may not be physical items. Would they appreciate lunch with you at their favorite restaurant or a kid-free date night with their spouse? Think outside the box! If your gift list is larger than your budget, consider sending handwritten holiday letters or baking festive treats. Don’t get caught up on spending the perfect amount of money. Instead, focus on finding creative ways to let the people in your world know that you care about them.

What If? What if your friend gives you an expensive gift that is way outside your budget? Are you obligated to reciprocate with a gift of equal monetary value? Absolutely not! Remember that gifts should be based on your budget—not theirs. Genuinely thank your friend for the generous gift and follow-up with a handwritten thank you note. Then, find a gift that suits your friend within your budget.

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